Aviation: 5/20 rule set to be tweaked, says Mahesh Sharma

Indicating that the decade-old norm for international operations by the domestic carriers, popularly known as 5/20 rule, is set to be tweaked, Union Minister Mahesh Sharma today expressed hope that the Union Cabinet will give its nod to the revised norm by this month.

Indicating that the decade-old norm for international operations by the domestic carriers, popularly known as 5/20 rule, is set to be tweaked, Union Minister Mahesh Sharma today expressed hope that the Union Cabinet will give its nod to the revised norm by this month.

The rule was a “matter of concern,” and has been addressed (appropriately), Sharma, who is Minister of State for Civil Aviation, said at an event here.

“(We) have sent the revised 5/20 rule for consultation… it should be back in 10-15 days and then can be taken up by the cabinet anytime,” he told reporters.

The existing regulation requires an Indian carrier to have a minimum five years of domestic flying experience and a fleet of at least 20 planes to fly overseas.

The issue of 5/20 international flying norm has witnessed extensive debates with legacy carriers opposing any changes to the rule, while start-up airlines –AirAsia India and Vistara — are against continuing with the requirement.

Sharma also said Civil Aviation Ministry has already sent the draft aviation policy for inter-ministerial consultation, adding that “it should be taken up by the cabinet anytime.”

All issues relating to the aviation sector will be addressed in new policy, he added.

Measures suggested in the draft policy, which was unveiled last October, seek to give a boost to the Indian aviation sector, which has a high growth potential, and strengthen regional connectivity.

It has suggested tax incentives for airlines, maintenance and repair works of aircraft besides mooting 2 per cent levy on all air tickets to fund regional connectivity scheme.

There are other significant proposals such as increasing FDI limit for foreign airlines, setting up of no-frills airports and providing viability gap funding for airlines to bolster regional air connectivity.

Sharma said that the Government was open to re-look at taxations on jet fuel for the states participating in the regional connectivity scheme.

“We have already proposed a haircut to bring taxation to 1 per cent on the regional connectivity scheme,” he said.

On the issue of fixing thresholds for economy class air fares, Sharma said that the “price capping” was being looked at through a consensus method.